Cove Energy (GM) (USOTC:CNVGY)Historical Stock Chart

--PTTEP will raise THB92.3 billion from 650 million new shares in rights offering

--PTTEP sets the offering price at THB142 a share, near the high end of the indicative range

--Price is "attractive," giving offering a good chance at success -analyst

(Adds analyst's comment on likely success of the rights offering, background on purpose of the issue, PTTEP's overseas strategy, details of the offering)

By Oranan Paweewun

BANGKOK--PTT Exploration & Production PCL (PTTEP.TH), the flagship subsidiary of state oil company PTT PCL (PTT.TH), is set to raise 92.3 billion baht ($3.01 billion) in Asia's largest rights issue this year.

The right issue is aimed at securing funds to finance PTTEP's recent acquisition of the U.K.'s Cove Energy PLC (CNVGY) and for future business expansion. PTTEP in October burnished its international profile by trumping Royal Dutch Shell PLC (RDSB) with its $2.2 billion bid for the Cove Energy, whose main asset is a massive gas find off Mozambique.

The offering price, at THB142 a share, represents a 7.8% discount compared with Thursday's closing price of THB154. Shareholders will be entitled to buy 0.196 new share per share they currently hold, PTTEP said in a statement Friday.

PTT will maintain its 65.3% shareholding, meaning it will buy 424.45 million new shares at a cost of THB60.27 billion.

PTTEP is earmarking a total of 650 million shares to existing shareholders in the rights offering, which it will hold between Dec. 3 and Dec. 6.

The Thai explorer is aggressively seeking stakes in offshore projects to meet rising oil and gas demand against a backdrop of declining production at home. PTTEP seeks to at least double its output, which stands around 300,000 barrels of oil equivalent a day, by 2020.

Chief Executive Tevin Vongvaich said recently that the company won't need to raise any more capital for at least the next three years following completion of the upcoming rights offering.

CIMB Securities Vice President Teerawut Kanniphakul said PTTEP's described THB142 as "attractive," giving the rights offering a good chance of success. Although THB92.3 billion falls short of the company's previous target of THB98 billion, it has strong cashflow, as seen from its 2012 earnings before interest, tax, depreciation, and amortization, estimated around THB60 billion, and 2013 net profit, estimated around THB50 billion, he said.

PTTEP holds stakes in 44 projects in a dozen countries, including Oman, Australia, Canada, Algeria, Vietnam and Myanmar. In its biggest overseas deal to date, it acquired in 2010 a 40% stake in the Kai Kos Dehseh oil sands project in Canada from Norway's Statoil SAS (STO) for $2.28 billion.

The new shares are expected to start trading on the Stock Exchange of Thailand on Dec. 14 if the offer is fully subscribed.

Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs, J.P. Morgan and UBS are the deal's international bookrunners and lead managers, while Phatra Securities, Tisco Securities and Finansa are the domestic bookrunners and lead managers.

--Nisha Gopalan in Hong Kong contributed to this article.

Write to Oranan Paweewun at oranan.paweewun@dowjones.com

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